ADVANTEST CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
Yen (Millions) | ||||||||||
Assets | December 31, 2008 | March 31, 2008 | ||||||||
Current assets: | ||||||||||
Cash and cash equivalents | ¥ | 118,240 | 147,348 | |||||||
Short-term investments | 17,250 | — | ||||||||
Trade receivables, net | 12,631 | 30,124 | ||||||||
Inventories | 16,168 | 26,823 | ||||||||
Deferred tax assets | 12,298 | 12,678 | ||||||||
Other current assets | 5,704 | 6,474 | ||||||||
Total current assets | 182,291 | 223,447 | ||||||||
Investment securities | 6,216 | 9,754 | ||||||||
Property, plant and equipment, net of accumulated | 44,697 | 50,765 | ||||||||
depreciation of 71,086 million yen and 70,318 million yen, | ||||||||||
as of December 31 and March 31, 2008, respectively | ||||||||||
Deferred tax assets | 16,520 | 6,488 | ||||||||
Intangible assets, net of accumulated | 3,524 | 3,476 | ||||||||
amortization of 3,467 million yen and 3,203 million yen, | ||||||||||
as of December 31 and March 31, 2008, respectively | ||||||||||
Other assets | 4,347 | 4,754 | ||||||||
Total assets | ¥ | 257,595 | 298,684 |
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Advantest’s Annual Report on Form 20-F for the year ended March 31, 2008 are an integral part of the consolidated financial statements.
-1-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
Yen (Millions) | |||||||||||
Liabilities and Stockholders’ Equity | December 31, 2008 | March 31, 2008 | |||||||||
Current liabilities: | |||||||||||
Trade accounts payable | 4,343 | 11,765 | |||||||||
Income taxes payable | 0 | 585 | |||||||||
Other accounts payable | 1,395 | 2,458 | |||||||||
Accrued expenses | 6,030 | 10,940 | |||||||||
Accrued warranty expenses | 2,226 | 3,143 | |||||||||
Other current liabilities | 2,412 | 2,804 | |||||||||
Total current liabilities | 16,406 | 31,695 | |||||||||
Accrued pension and severance cost | 10,344 | 10,711 | |||||||||
Other liabilities | 1,542 | 2,094 | |||||||||
Total liabilities | 28,292 | 44,500 | |||||||||
Commitments and contingent liabilities | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock, | |||||||||||
Authorized 440,000,000 shares; issued 199,566,770 shares | 32,363 | 32,363 | |||||||||
Capital surplus | 40,244 | 40,072 | |||||||||
Retained earnings | 259,050 | 278,689 | |||||||||
Accumulated other comprehensive income (loss) | (13,027 | ) | (7,615 | ) | |||||||
Treasury stock, 20,842,554 shares and 20,840,721 shares | |||||||||||
as of December 31 and March 31, 2008, respectively | (89,327 | ) | (89,325 | ) | |||||||
Total stockholders’ equity | 229,303 | 254,184 | |||||||||
Total liabilities and stockholders’ equity | ¥ | 257,595 | 298,684 |
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Advantest’s Annual Report on Form 20-F for the year ended March 31, 2008 are an integral part of the consolidated financial statements.
-2-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
Yen (Millions) | ||||||
Nine months ended | ||||||
December 31, 2008 | ||||||
Net sales | ¥ | 67,117 | ||||
Cost of sales | 38,323 | |||||
Gross profit | 28,794 | |||||
Research and development expenses | 19,644 | |||||
Selling, general and administrative expenses | 24,695 | |||||
Operating income (loss) | (15,545 | ) | ||||
Other income (expense): | ||||||
Interest and dividends income | 1,801 | |||||
Interest expense | (8 | ) | ||||
Other, net | (4,225 | ) | ||||
Total other income (expense) | (2,432 | ) | ||||
Income (loss) before income taxes and equity | ||||||
in earnings (loss) of affiliated company | (17,977 | ) | ||||
Income taxes | (7,374 | ) | ||||
Equity in earnings (loss) of affiliated company | (98 | ) | ||||
Net income (loss) | ¥ | (10,701 | ) |
Yen | |||||
Nine months ended | |||||
December 31, 2008 | |||||
Net income (loss) per share: | |||||
Basic | ¥ | (59.87 | ) | ||
Diluted | (59.87 | ) |
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Advantest’s Annual Report on Form 20-F for the year ended March 31, 2008 are an integral part of the consolidated financial statements.
-3-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
Yen (Millions) | ||||||
Three months ended | ||||||
December 31, 2008 | ||||||
Net sales | ¥ | 14,597 | ||||
Cost of sales | 12,686 | |||||
Gross profit | 1,911 | |||||
Research and development expenses | 6,072 | |||||
Selling, general and administrative expenses | 7,469 | |||||
Operating income (loss) | (11,630 | ) | ||||
Other income (expense): | ||||||
Interest and dividends income | 548 | |||||
Interest expense | (2 | ) | ||||
Other, net | (2,008 | ) | ||||
Total other income (expense) | (1,462 | ) | ||||
Income (loss) before income taxes and equity | ||||||
in earnings (loss) of affiliated company | (13,092 | ) | ||||
Income taxes | (5,361 | ) | ||||
Equity in earnings (loss) of affiliated company | (27 | ) | ||||
Net income (loss) | ¥ | (7,758 | ) |
Yen | |||||
Three months ended | |||||
December 31, 2008 | |||||
Net income (loss) per share: | |||||
Basic | ¥ | (43.40 | ) | ||
Diluted | (43.40 | ) |
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Advantest’s Annual Report on Form 20-F for the year ended March 31, 2008 are an integral part of the consolidated financial statements.
-4-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Yen (Millions) | |||||||||
Nine months ended | |||||||||
December 31, 2008 | |||||||||
Cash flows from operating activities: | |||||||||
Net income (loss) | ¥ | (10,701 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by | |||||||||
operating activities: | |||||||||
Depreciation and amortization | 6,956 | ||||||||
Deferred income taxes | (9,401 | ) | |||||||
Stock option compensation expense | 172 | ||||||||
Changes in assets and liabilities: | |||||||||
Trade receivables | 16,648 | ||||||||
Inventories | 11,144 | ||||||||
Trade accounts payable | (7,143 | ) | |||||||
Income taxes payable | (156 | ) | |||||||
Accrued expenses | (4,839 | ) | |||||||
Accrued warranty expenses | (1,180 | ) | |||||||
Accrued pension and severance cost | (254 | ) | |||||||
Other | 6,456 | ||||||||
Net cash provided by operating activities | 7,702 | ||||||||
Cash flows from investing activities: | |||||||||
(Increase) decrease in short-term investments | (18,417 | ) | |||||||
Proceeds from sale of non-marketable investment securities | 34 | ||||||||
Proceeds from sale of property, plant and equipment | 390 | ||||||||
Purchases of intangible assets | (568 | ) | |||||||
Purchases of property, plant and equipment | (4,523 | ) | |||||||
Other | (322 | ) | |||||||
Net cash used in investing activities | (23,406 | ) | |||||||
Cash flows from financing activities: | |||||||||
Dividends paid | (8,669 | ) | |||||||
Other | (5 | ) | |||||||
Net cash used in financing activities | (8,674 | ) | |||||||
Net effect of exchange rate changes on cash and cash equivalents | (4,730 | ) | |||||||
Net change in cash and cash equivalents | (29,108 | ) | |||||||
Cash and cash equivalents at beginning of period | 147,348 | ||||||||
Cash and cash equivalents at end of period | ¥ | 118,240 |
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Advantest’s Annual Report on Form 20-F for the year ended March 31, 2008 are an integral part of the consolidated financial statements.
-5-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(1) Accounting Principles, Procedures and the Presentation of the Consolidated Financial Statements
(a) Terminology, Form and Method of Preparation of the Consolidated Financial Statements
Advantest Corporation (the “Company”) and its consolidated subsidiaries (collectively “Advantest”) prepares the consolidated financial statements in accordance with the accounting principles, procedures, terminology, form and method of preparation required in the United States of America in connection with its issuance of American Depository Shares as established under Accounting Research Bulletins (“ARB”), Accounting Principles Board (“APB”) statements, Statements of Financial Accounting Standards (“SFAS”) and other relevant sources (collectively “U.S. GAAP”).
Advantest prepared the interim consolidated financial statements that accompany these notes in conformity with U.S. GAAP, consistent in all material respects with those applied in Advantest’s Annual Report on Form 20-F for the year ended March 31, 2008 except for changes discussed in Note (2)-(b).
The interim financial statements are unaudited, but reflect all normal adjustments that are, in the opinion of management, necessary to provide a fair presentation of results for the interim periods presented. This interim information should be read with the consolidated financial statements in Advantest’s Annual Report on Form 20-F for the year ended March 31, 2008.
(b) Preparation of the Consolidated Financial Statements and Registration with the U.S. Securities and Exchange Commission
The Company became listed on the New York Stock Exchange on September 17, 2001 (local time) by means of an issuance of American Depository Shares, and has been filing a Form 20-F (equivalent to the Annual Securities Report in Japan) with the U.S. Securities and Exchange Commission since the year ended March 31, 2002. Advantest prepares the consolidated financial statements in its Form 20-F in accordance with U.S. GAAP.
(c) Significant differences from the preparation of financial statements under Japanese GAAP
Of the accounting principles, procedures and method of presentation adopted by Advantest, the following is a brief summary description of the significant differences from the preparation of financial statements using the accounting principles, procedure and method of presentation under Japanese GAAP, as required under the Financial Instruments and Exchange Law of Japan:
(i) Allowance for compensated absences
In accordance with SFAS No. 43, “Accounting for Compensated Absences”, an allowance is provided for the right of employees to receive compensated absences in the future.
(ii) Accrued pension and severance cost
In accordance with SFAS No. 87, “Employers’ Accounting for Pensions” and SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”, the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligation) of pension plans is recognized in the consolidated balance sheets.
(iii) Goodwill
In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets”, goodwill is no longer amortized, but instead is tested for impairment at least annually.
-6-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(2) Description of Business and Summary of Significant Accounting Policies and Practices
(a) | Description of Business |
Advantest manufactures and sells semiconductor and component test system products and mechatronics-related products such as test handlers and device interfaces. Advantest also engages in research and development activities and provides maintenance and support services associated with these products.
Description of the business by segment is as follows:
The semiconductor and component test system segment provides customers with test system products for the semiconductor industry and the electronic parts industry. Product lines provided in the semiconductor and component test system segment include test systems for memory semiconductors for memory semiconductor devices and test systems for SoC (“System-on-a-Chip”) semiconductors for non memory semiconductor devices.
The mechatronics system segment provides product lines such as test handlers, mechatronic-applied products for handling semiconductor devices, device interfaces that serve as interfaces with the devices that are measured and operations related to nano-technology products.
The services, support and others segment consists of comprehensive customer solutions provided in connection with the above segments, support services, equipment lease business and others.
(b) | Accounting Change and Accounting Standards Not Yet Adopted |
In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”) which defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure. SFAS 157 does not expand the use of fair value to any new circumstances, but does require additional disclosure in both annual and quarterly reports. Advantest adopted SFAS 157 and its related amendments for financial assets and liabilities on April 1, 2008. The adoption of SFAS 157 did not have a significant impact on Advantest’s consolidated results of operations and financial condition. SFAS 157 will be effective for non-financial assets and liabilities in financial statements issued for fiscal years beginning after November 15, 2008. Advantest is currently evaluating the effect that the adoption of SFAS 157 for non-financial assets and liabilities will have on its consolidated results of operations and financial condition.
In February 2007, the FASB issued SFAS No.159, “The Fair Value Option for Financial Assets and Financial Liabilities-Including an amendment of FASB Statement No.115” (“SFAS 159”). SFAS 159 provides companies with an option to measure selected financial assets and liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings. Advantest adopted SFAS 159 on April 1, 2008 and did not elect the fair value option for any financial instruments.
-7-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”). SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is effective for fiscal years beginning on or after December 15, 2008 and is required to be adopted by Advantest in the first quarter beginning April 1, 2009. Advantest is currently evaluating the effect that the adoption of SFAS 141R will have on its consolidated results of operations and financial condition.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statement, an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008 and is required to be adopted by Advantest in the first quarter beginning April 1, 2009. Advantest is currently evaluating the effect that the adoption of SFAS 160 will have on its consolidated results of operations and financial condition.
(3) Inventories
Inventories at December 31, 2008 and March 31, 2008 are composed of the following:
Yen (Millions) | ||||||||
December 31, 2008 | March 31, 2008 | |||||||
Finished goods | ¥ | 5,753 | 8,258 | |||||
Work in process | 7,605 | 13,998 | ||||||
Raw materials and supplies | 2,810 | 4,567 | ||||||
¥ | 16,168 | 26,823 |
-8-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(4) Fair Value Measurement
SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three levels:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 - Observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly or indirectly.
Level 3 - Unobservable inputs for the asset or liability.
Assets/Liabilities Measured at Fair Value on a Recurring Basis
As of December 31, 2008, carrying amount of financial assets and liabilities that were measured at fair value on a recurring basis by level is as follows:
Yen (Millions) | ||||||||||||||||
Fair Value Measurements at December 31, 2008 | ||||||||||||||||
Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Financial Assets | ||||||||||||||||
Available-for-sale equity securities | 3,486 | 3,486 | - | - | ||||||||||||
Total assets measured at fair value | 3,486 | 3,486 | - | - |
The table does not include assets and liabilities which are measured at historical cost or any basis other than fair value. Advantest’s financial assets and liabilities measured at fair value consist of available-for-sale equity securities. Adjustments to fair value of available-for-sale equity securities are recorded as an increase or decrease, net of tax, in accumulated other comprehensive income except where losses are considered to be other than temporary, in which case the losses are recorded in other income (expense).
-9-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Assets/Liabilities Measured at Fair Value on a Nonrecurring Basis
As of December 31, 2008, carrying amount of financial assets and liabilities that were measured at fair value on a nonrecurring basis by level is as follows:
Yen (Millions) | Total gains | Total gains | ||||||||||||||||||||||
Fair Value Measurements | (losses) for | (losses) for | ||||||||||||||||||||||
at December 31, 2008 | nine months | three months | ||||||||||||||||||||||
Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Unobservable Inputs | ended December 31, 2008 | ended December 31, 2008 | ||||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||
Non-marketable equity securities | 583 | - | 583 | - | (417 | ) | (417 | ) | ||||||||||||||||
Total gains (losses) for assets held as of December 31, 2008 | (417 | ) | (417 | ) |
Non-marketable equity securities with a carrying amount of ¥1,000 million were written down to their fair value of ¥583 million, resulting in an other-than-temporary impairment charge of ¥417 million, which was included in other income (expense) in the accompanying consolidated results of operations for the nine months and the three months ended December 31, 2008.
-10-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(5) Income Taxes
As of December 31, 2008, the estimated annual effective tax rate for the year ending March 31, 2009 is approximately 41.0 percent and differs from the 40.4 percent statutory income tax rate. The differences are primarily due to the effects of foreign tax rates, tax credits and undistributed earnings of foreign subsidiaries.
(6) Comprehensive Income (Loss)
The components of comprehensive income (loss) , net of tax, are as follows:
Yen (Millions) | ||||
Nine months ended December 31, 2008 | ||||
Net income (loss) | ¥ | (10,701 | ) | |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (4,990 | ) | ||
Net unrealized gains (losses) on investment securities, net of tax | ||||
Net unrealized gains (losses) arising during the period | (2,070 | ) | ||
Less reclassification adjustments for net gains (losses) realized in earnings | (1,615 | ) | ||
Net unrealized gains (losses) | (455 | ) | ||
Pension related adjustment, net of tax | 33 | |||
Total comprehensive income (loss) | ¥ | (16,113 | ) |
Yen (Millions) | ||||
Three months ended December 31, 2008 | ||||
Net income (loss) | ¥ | (7,758 | ) | |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (5,780 | ) | ||
Net unrealized gains (losses) on investment securities, net of tax | ||||
Net unrealized gains (losses) arising during the period | (1,224 | ) | ||
Less reclassification adjustments for net gains (losses) realized in earnings | (556 | ) | ||
Net unrealized gains (losses) | (668 | ) | ||
Pension related adjustment, net of tax | 11 | |||
Total comprehensive income (loss) | ¥ | (14,195 | ) |
-11-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(7) Stock-Based Compensation
In July 2008, stock options were issued to directors, executive officers, corporate auditors and certain employees of the Company and its subsidiaries under a stock option plan approved by the Board of Directors. The number of granted shares totaled 704,000. Options were granted with an exercise price of ¥2,653 per share that is equal to the higher of (1) 1.05 times the average price of the Company’s common shares of the preceding month on the date of grant and (2) the closing price of the Company’s common shares traded on the Tokyo Stock Exchange on the date of grant. The options have an exercise period of 4 years and are exercisable from April 1, 2009.
Stock based compensation expense recognized was ¥172 million and ¥86 million, which was included in selling, general and administrative expenses for the nine months and the three months ended December 31, 2008. The recognized tax benefit was ¥45 million and ¥22 million for the nine months and the three months ended December 31, 2008.
The weighted average fair value per share for stock option that was granted during the nine months ended December 31, 2008 was ¥369.
-12-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(8) Accrued Pension and Severance Cost
The components of net periodic benefit cost recognized are as follows:
Yen (Millions) Nine months ended | ||||
December 31, 2008 | ||||
Service cost | ¥ | 1,091 | ||
Interest cost | 525 | |||
Expected return on plan assets | (257 | ) | ||
Amortization of unrecognized: | ||||
Net actuarial (gain) or loss | 213 | |||
Prior service (benefit) cost | (158 | ) | ||
Net periodic benefit cost | 1,414 |
Yen (Millions) Three months ended | ||||
December 31, 2008 | ||||
Service cost | ¥ | 338 | ||
Interest cost | 175 | |||
Expected return on plan assets | (85 | ) | ||
Amortization of unrecognized: | ||||
Net actuarial (gain) or loss | 71 | |||
Prior service (benefit) cost | (53 | ) | ||
Net periodic benefit cost | 446 |
(9) Dividends
Based on the resolution for the payment of year-end dividends at the Board of Directors held on April 25, 2008, Advantest paid cash dividends totaling ¥4,468 million, ¥25 per share of common stock on June 3, 2008 to stockholders of record on March 31, 2008.
Based on the resolution for the payment of interim dividends at the Board of Directors held on October 30, 2008, Advantest paid cash dividends totaling ¥4,468 million, ¥25 per share of common stock on December 1, 2008 to stockholders of record on September 30, 2008.
-13-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(10) Accrued Warranty Expenses
Advantest issues contractual product warranties under which it generally guarantees the performance of products delivered and services rendered for a certain period. Changes in accrued warranty expenses for the nine months ended December 31, 2008 was summarized as follows:
Yen (Millions) Nine months ended December 31, 2008 | ||||
Balance at beginning of period | 3,143 | |||
Addition | 3,440 | |||
Utilization | (4,308 | ) | ||
Translation adjustments | (49 | ) | ||
Balance at end of period | 2,226 |
(11) Other income (expense)
Other income (expense) include impairment losses on investment securities of ¥2,709 million and ¥933 million, and exchange losses of ¥1,715 million and ¥1,098 million for the nine months and the three months ended December 31, 2008, respectively.
-14-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(12) Operating Segment and Geographic Information
(Operating Segment Information)
Advantest manufactures and sells semiconductor and component test system products and mechatronics-related products such as test handlers and device interfaces. Advantest also engages in research and development activities and provides maintenance and support services associated with these products. In accordance with SFAS No. 131, “Disclosure about Segments of an Enterprise and Related Information”, Advantest has three operating and reportable segments, which are the design, manufacturing, and sale of semiconductor and component test systems, mechatronics systems and services, support and others. These operating segments are determined based on the nature of the products and the markets.
Operating segment information for the three months and the nine months ended December 31, 2008 are as follows:
Yen (Millions) | ||||||||||||||||||||
Three months ended December 31, 2008 | ||||||||||||||||||||
Semiconductor and Component Test System Business | Mechatronics System Business | Services, Support and Others | Elimination and Corporate | Total | ||||||||||||||||
Net sales to unaffiliated customers | 7,404 | 2,189 | 5,004 | - | 14,597 | |||||||||||||||
Inter-segment sales | 98 | 98 | - | (196 | ) | - | ||||||||||||||
Net sales | 7,502 | 2,287 | 5,004 | (196 | ) | 14,597 | ||||||||||||||
Operating income (loss) before stock option compensation expense | (9,665 | ) | (1,476 | ) | 17 | (420 | ) | (11,544 | ) | |||||||||||
Adjustment: | ||||||||||||||||||||
Stock option compensation expense | 86 | |||||||||||||||||||
Operating income (loss) | (11,630 | ) |
-15-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Yen (Millions) | ||||||||||||||||||||
Nine months ended December 31, 2008 | ||||||||||||||||||||
Semiconductor and Component Test System Business | Mechatronics System Business | Services, Support and Others | Elimination and Corporate | Total | ||||||||||||||||
Net sales to unaffiliated customers | 42,698 | 11,175 | 13,244 | - | 67,117 | |||||||||||||||
Inter-segment sales | 448 | 2,175 | - | (2,623 | ) | - | ||||||||||||||
Net sales | 43,146 | 13,350 | 13,244 | (2,623 | ) | 67,117 | ||||||||||||||
Operating income (loss) before stock option compensation expense | (8,277 | ) | (3,181 | ) | 1,005 | (4,920 | ) | (15,373 | ) | |||||||||||
Adjustment: | ||||||||||||||||||||
Stock option compensation expense | 172 | |||||||||||||||||||
Operating income (loss) | (15,545 | ) |
Adjustments to operating income (loss) in Corporate principally represent corporate general and administrative expenses and research and development expenses related to fundamental research activities that are not allocated to operating segments.
Advantest uses the operating income (loss) before stock option compensation expense for management's analysis of business segment results.
-16-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(Consolidated Net Sales by Geographical Areas)
Net sales to unaffiliated customers for the three months and the nine months ended December 31, 2008 are as follows:
Yen (Millions) | ||||
Three months ended December 31, 2008 | ||||
Japan | 6,516 | |||
Americas | 2,751 | |||
Europe | 898 | |||
Asia | 4,432 | |||
Total | 14,597 | |||
Yen (Millions) | ||||
Nine months ended December 31, 2008 | ||||
Japan | 20,477 | |||
Americas | 10,794 | |||
Europe | 1,792 | |||
Asia | 34,054 | |||
Total | 67,117 | |||
(Notes) | 1. | Net sales to unaffiliated customers are based on the customer’s location. | |
2. | Each of the segments includes primarily the following countries or regions: | ||
(1) Americas | U.S.A. and Republic of Costa Rica, etc. | ||
(2) Europe | Israel, Ireland, Germany and Portugal, etc. | ||
(3) Asia | South Korea, Taiwan and China, etc. |
-17-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Supplemental Segment Information
(Geographic Segment Information / Based on Location of Advantest and its Affiliates)
The following table sets forth the net sales and operating income (loss) for the three months and the nine months ended December 31, 2008, classified by location of office from which product was shipped. This information is provided as supplemental information in addition to the requirements of SFAS No. 131 in consideration of the disclosure requirements under the Financial Instruments and Exchange Law of Japan.
Yen (Millions) Three months ended December 31, 2008 | |||||||||||||||||||||
Japan | Americas | Europe | Asia | Total | Elimination and Corporate | Consoli- dated | |||||||||||||||
Net sales | |||||||||||||||||||||
(1) Net sales to unaffiliated customers | 8,135 | 4,447 | 733 | 1,282 | 14,597 | - | 14,597 | ||||||||||||||
(2) Inter-segment | 4,472 | 809 | 482 | 1,101 | 6,864 | (6,864 | ) | - | |||||||||||||
Total | 12,607 | 5,256 | 1,215 | 2,383 | 21,461 | (6,864 | ) | 14,597 | |||||||||||||
Operating income (loss) | (11,265 | ) | (101 | ) | (452 | ) | 358 | (11,460 | ) | (170 | ) | (11,630 | ) |
Yen (Millions) Nine months ended December 31, 2008 | |||||||||||||||||||||
Japan | Americas | Europe | Asia | Total | Elimination and Corporate | Consoli- dated | |||||||||||||||
Net sales | |||||||||||||||||||||
(1) Net sales to unaffiliated customers | 37,378 | 17,083 | 2,239 | 10,417 | 67,117 | - | 67,117 | ||||||||||||||
(2) Inter-segment | 19,721 | 2,447 | 999 | 3,906 | 27,073 | (27,073 | ) | - | |||||||||||||
Total | 57,099 | 19,530 | 3,238 | 14,323 | 94,190 | (27,073 | ) | 67,117 | |||||||||||||
Operating income (loss) | (15,202 | ) | 1,834 | (711 | ) | 3,173 | (10,906 | ) | (4,639 | ) | (15,545 | ) |
(Notes) | 1. | Geographical segments are organized by physical proximity of countries or regions. | |
2. | Each of the geographical segments includes primarily the following countries or regions: | ||
(1) Americas | U.S.A., etc. | ||
(2) Europe | Germany, etc. | ||
(3) Asia | South Korea, Taiwan, Singapore, etc. |
-18-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(13) Per Share Data
The following table sets forth the computation of basic and diluted net income (loss) per share for the nine months and the three months ended December 31, 2008:
Yen (Millions) except per share data | ||||
Nine months ended | ||||
December 31, 2008 | ||||
Numerator: | ||||
Net income (loss) | (10,701 | ) | ||
Denominator: | ||||
Basic weighted average shares of common stock outstanding | 178,725,171 | |||
Dilutive effect of exercise of stock options | - | |||
Diluted weighted average shares of common stock outstanding | 178,725,171 | |||
Basic net income (loss) per share | (59.87 | ) | ||
Diluted net income (loss) per share | (59.87 | ) |
Yen (Millions) except per share data | ||||
Three months ended | ||||
December 31, 2008 | ||||
Numerator: | ||||
Net income (loss) | (7,758 | ) | ||
Denominator: | ||||
Basic weighted average shares of common stock outstanding | 178,724,470 | |||
Dilutive effect of exercise of stock options | - | |||
Diluted weighted average shares of common stock outstanding | 178,724,470 | |||
Basic net income (loss) per share | (43.40 | ) | ||
Diluted net income (loss) per share | (43.40 | ) |
At December 31, 2008, Advantest had outstanding stock options exercisable into 4,986,980 shares of common stock, which were anti-dilutive and excluded from the calculation of diluted net income (loss) per share but could potentially dilute net income (loss) per share in future periods.
-19-
ADVANTEST CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(14) Subsequent event
On January 28, 2009, the Board of Directors of the Company approved an early retirement program for certain employees. The Company and its domestic subsidiaries would provide an additional lump-sum termination benefit to eligible employees electing the early retirement option. The application period for the option ends on February 25, 2009, and the total cost could be approximately ¥4,000 million. Actual results are subject to the outcome of the applications.
-20-